Energy Freedom Now

Such fuels include natural gas, methanol (which can be produced from anything with carbon in it, including natural gas and coal) and ethanol (which can be generated from sources other than corn, particularly as cellulosic technologies come on stream). Already, thanks to the price differentials between these American-available fuels on the one hand, and gasoline and diesel obtained from oil on the other, there is a growing interest on the part of consumers and businesses in having what has been called “fuel choice” – the ability to use alternatives to oil-based transportation fuels, as well as those derived from petroleum.

Some believe that market forces alone will give the American public such energy freedom. When oil prices are high, that confidence seems warranted. Unfortunately, history suggests that whenever the nation contemplates serious actions to reduce its addiction to petroleum, OPEC steps in to manipulate the market and keep us hooked.

Even if that were not the case, waiting for the private sector to act in a comprehensive and sustained fashion sufficient to reduce our vulnerabilities to disruptions in our energy supplies from overseas is a formula for being overtaken by such disruptions. Simply put, we cannot afford to wait for the market to provide energy freedom.

The federal government can and should play a catalytic role in affording the public fuel choice. It need not tell them what kind of fuel to use, just help ensure that they and the U.S. transportationsector can use something other than oil-based products.

For example, a federal requirement that new cars sold in America be capable of using methanol and ethanol, as well as gasoline, would create markets for such alcohol-based fuels and competition that will drive down gas prices. Some recoil at the idea of such a government “mandate” as is contained in the bipartisan Open Fuel Standard Act (H.R. 1687). But, such a capability is very inexpensive to include in new cars and, as President Reagan’s National Security Advisor, Robert “Bud” McFarlane, wrote last week in the Wall Street Journal: “Neglecting to require auto companies to open their vehicles to fuel competition is to mandate a continued monopoly by oil.”

Another sensible step would be for the government to encourage the manufacture of big trucks powered by natural gas. My friend Boone Pickens has proposed tax credits that would incentivize industry to produce 140,000such trucks. While some libertarians rail against the bill Mr. Pickens supports, the NAT Gas Act (H.R. 1380) forincluding what they characterize as “subsidies,” no less a small-government man than Rep. Ron Paul (R-TX) endorses it. He draws a sensible distinction between subsidies that amount to “government taking money from people and giving it to a favored interest” and incentives that allow “industries, businesses and individuals…to keep more of the money they have earned.”